Indian Economy: News and Discussion (Jan 1 2010)

Rahul Mehta · Post by **Rahul Mehta** » 08 Dec 2010 21:34

Suraj wrote:I look forward to the day we overtake UK in absolute GDP. It will put an end to a 120-year historical aberration; the only part of us they ought to see on that table is our rear end from far behind

I look forward for the day when out per capita GDP will exceed not just UK, but US as well.

===

Newspapers report that petrol prices may rise by Rs 2. The biggest reason IMO is rampant rupee manufacturing, All prices, including land prices are set to increases.

.

Singha · Post by **Singha** » 08 Dec 2010 22:10

italy, france, germany and uk have led a charmed life on that table because the dollar weakened wrt to the euro last few yrs and this table is in dollars, so they got a 'free' and massive dollar value boost at various points.

else italy would be roadkill and we'd be breathing down the neck of the uk-french combine.

we will cross them well before end of this decade for sure and become 5th largest eco.

brazil might max out due to population resource constraints....

Singha · Post by **Singha** » 08 Dec 2010 22:31

WSJ -

India to Relax Retail Restrictions Soon

By AMOL SHARMA

NEW DELHI—India is likely to loosen foreign-investment restrictions in its retail sector in coming months, following deliberations about the potential impact on the nation's millions of small-time shopkeepers, a senior government official said.

Indian Commerce Secretary Rahul Khullar said a consensus is "around the corner" and that the government is likely to relax regulations barring foreign ownership in multibrand retailers, such as supermarkets and big department stores.

"The status quo will definitely change," Mr. Khullar said in an interview Tuesday. The precise level of equity foreign companies will be allowed to have remains a matter of debate. "One extreme is 100%. The other extreme is zero. You're going to be somewhere in the middle," he said.

Liberalizing the retail-investment cap would be a major economic reform for India. It would also offer U.S. and European companies a route into India's $444 billion retail sector so they can market their products to India's fast-growing middle class and benefit from the country's nearly 9% economic growth.

U.S. President Barack Obama during a trip here last month called for India to remove caps on foreign investment in sectors including retail and insurance. And Wal-Mart Stores Inc. Chief Executive Mike Duke said in a speech in New Delhi in October that permitting foreign ownership of retail stores would reduce prices, create jobs, and modernize India's farm-to-market supply chain.

Wal-Mart on Tuesday reiterated its support for expanding foreign retail investment and said the company would review its opportunities if the nation's regulations are revised.

France has pushed the same argument in official meetings this week in New Delhi during a visit by President Nicolas Sarkozy. French companies such as Carrefour SA haven't been able to enter India under the existing regulations. France's minister of economy and finance, Christine Lagarde, said Monday that French companies would invest more than €10 billion, or about $13 billion, in India by 2012 if such sectors as retail were liberalized, according to a report by Press Trust of India. Carrefour declined to comment on Mr. Khullar's statements.

Mr. Khullar, the top official in the Commerce Ministry, said the government is in the final stages of a five-month review of comments from various agencies and interest groups about a proposal to relax the retail-investment cap.

Officials have said before that the government favors opening up the retail sector. But the timing has been more vague. Also, the Commerce Ministry can change the policy without approval from India's Parliament, Mr. Khullar said.

Critics of the reform proposal have said competition from big foreign companies would hurt the millions of small-time retailers that dot urban India's landscape, carrying goods such as basic groceries, bath products and clothes.

But Mr. Khullar said India can maintain the character of its local markets, pointing to cities like New York and Washington, where he says neighborhood stores survive amid big supermarkets. "There will always be a niche, a place, for the local guy," he said.

He said the government has had to think through the "intensely political" issue, given that the retail sector employs tens of millions of people in India. India has promised significant reforms of its foreign-investment caps in several sectors under the current government, led by Prime Minister Manmohan Singh, but it has yet to enact major changes.

"The deliberation and debate has gone on long enough," Mr. Khullar said, referring to the retail issue. "I think it's time for a decision."

India opened up to foreign investment in single-brand retail companies in 2006, allowing overseas ownership of up to 51%. But some large single-brand retailers, such as Swedish furniture giant IKEA Group, say they prefer to operate fully owned subsidiaries in India.

The government says it approved 57 of 94 single-brand investment proposals through May, allowing companies selling goods such as sportswear, luxury goods, jewelry, and apparel to set up branches in India through joint ventures.
—Miguel Bustillo contributed to this article.

Prem · Post by **Prem** » 08 Dec 2010 23:36

At current Hindu rate of growth , in seven years we jump over Europeans and go to number 4 then another 2-3 years before we can reach over japanese shoulders to touch Chinese sensitivities and insecurities. This is the last decade of century old struggle, a dawn of new era between 2020-2025. American century, Chinese decades and Indian millenium to reverse EIC and IBs. And Rupee might become the currency of GULf in near future.

http://gulfnews.com/business/markets/in ... y-1.725258

India's rupee strengthened for the sixth day yesterday, its longest winning streak since September, on speculation global funds will add to holdings of the nation's assets to benefit from the improving economy

ramana · Post by **ramana** » 09 Dec 2010 00:30

Prem,
Do you recall BRF meets in early part of 2000 decade where we used to have Suraj present us his views on RAND, GS, BRIC reports and question him on the tipping point? Those were the days wehn we tread a lonely path.

Abhijeet · Post by **Abhijeet** » 09 Dec 2010 00:38

What is the reason for the steady increase in petrol prices in India over the last 1.5 years? In April 2009, petrol was Rs. 44 a litre; it is now around Rs. 58 a litre.

I understand that there was some catch-up because prices were kept artificially low for a period when international crude prices were high. But prices seem to creep up silently at periodic intervals, for no externally apparent reason. They are now close to $5 a gallon. (If what Rahul has posted above about a Rs. 2 increase is true, petrol will cost about Rs. 60 per litre -- that's just standard petrol, not Speed or any fancy stuff.)

As far as I know crude prices are not rising in the same way. So what's behind the slow, steady increase?

suryag · Post by **suryag** » 09 Dec 2010 01:59

World's highest remittances: India is No.1

Poor pakis are below BDs in the list.

Theo_Fidel · Post by **Theo_Fidel** » 09 Dec 2010 02:30

These are profitable rates. Take that Panda lurks.

http://www.icicibank.com/interest-rates.html#fd

Banks fixed deposit rates.

1 year to 389 days 7.25% 7.75%
2 years to 789 days 7.50% 8.00%
5 years upto 10 years 8.25% 8.75%

Prem · Post by **Prem** » 09 Dec 2010 02:44

ramana wrote:Prem,
Do you recall BRF meets in early part of 2000 decade where we used to have Suraj present us his views on RAND, GS, BRIC reports and question him on the tipping point? Those were the days wehn we tread a lonely path.

I remember Suraj Sir came with his lap top full of data and graphs , sat in the middle and dispersed the gyan with equanimity to all those who listened . Indians have been waiting patiently for centuries and its titilating to realize that Indic prevailation will be happening in our life time. Hughe accomplishment in the light of the horrible historic experience. Wonder if Neel still take interest in this as AFAIK he was the first to bring up the subject of economic .

Suraj · Post by **Suraj** » 09 Dec 2010 03:17

Why are you guys calling me 'sir' ?

Theo_Fidel · Post by **Theo_Fidel** » 09 Dec 2010 07:45

After checking out Google Earth I thought I'd post some images of how our cities are growing rapidly.
What really suprised me was how rapidly the Tier 2 & 3 cities are growing. Esp. in the last 10 years.

Here's Bijapur, Karnataka. If you had never heard of this place, don't worry neither had I. It appears to have doubled in the past 10 years.

Warning! large images.

Here's Indore, MP. Also appears to have doubled in 10 years. look at the layouts for the next ten years. likely to quadruple!

All this while we went from a per capita income of $600 to $1500.
Imagine the next ten years when income goes from $1500 to $5000. The game will really be on.

Rahul Mehta · Post by **Rahul Mehta** » 09 Dec 2010 08:02

Abhijeet wrote:What is the reason for the steady increase in petrol prices in India over the last 1.5 years? In April 2009, petrol was Rs. 44 a litre; it is now around Rs. 58 a litre. ...... So what's behind the slow, steady increase?

The one and only reason is rampant manufacturing of rupees.

Indian rupee volume has increased by about 16% a year in past 2 years, which makes it about 24% in 18 months time you said. Crude manufacturing did not increase by 18%. So 24% more rupees chasing almost same amount of crude and so the price rise.There is no rocket science or brain surgery here.

The manufacturing of rupees will always increase in price rise of commodities and land, though all commodities and plots' prices may not rise by same percentage.

===

Theo,

Yes. Most cities have all doubled, tripled in past 6 years. Thats because permissions to convert Agricultural plots into NA plots came in 2004-now period at a rate much faster than pre-2004 period. Or rather, the individuals who had slowed down (A -> NA) permission process before 2004 chose not to speed it after 2004. Why? CT area, OST.

Pranav · Post by **Pranav** » 09 Dec 2010 08:37

Singha wrote:WSJ -

India to Relax Retail Restrictions Soon

If this means Wal-marts filled with Chinese imports, then that's precisely the wrong direction in which to go.

Does anybody know what the duties are on imports of items like alarm clocks, fireworks, plastics etc?

Prem · Post by **Prem** » 09 Dec 2010 08:50

I think the deal with Walmart is that they will do certain percentage of ( Billions of $) purchase from india to sell in US market. Its a beginning but it will help sustaining Indian commodity export growth and diminsihing WM reliance on China. Win win for both .

a_bharat · Post by **a_bharat** » 09 Dec 2010 09:01

Rahul Mehta wrote:
Abhijeet wrote:What is the reason for the steady increase in petrol prices in India over the last 1.5 years? In April 2009, petrol was Rs. 44 a litre; it is now around Rs. 58 a litre. ...... So what's behind the slow, steady increase?
The one and only reason is rampant manufacturing of rupees.

Crude oil price was about 50$ in Apr 09 and is at 90$ now.
We had elections then, and elections are 3.5 years away now.

Nihat · Post by **Nihat** » 09 Dec 2010 11:16

Prem wrote:I think the dal with Walmart is that they will do certain percentage of ( Billions of $) purchase from india to sell in US market. Its a beginning but it will help sustaining Indian commodity export growth and diminsihing WM reliance on China. Win win for both .

Instead , why not source their comodities from India itself. American products are fine but last thing we need is more chinese dumplings

Nihat · Post by **Nihat** » 09 Dec 2010 11:21

Exports surge 27%, on course for $200bn mark

Robust shipments across sectors and a narrowing trade deficit of $8.9 billion due to a lower rise in imports pumped up November exports to 26.8% at $18.9 billion.

Nov car sales zoom 21%, may face hurdles ahead

According to numbers released by the Society of Indian Automobile Manufacturers (Siam), car sales in the domestic market stood at 1.61 lakh units in November against 1.33 lakh units in the same month last year. However, the overall volumes have dropped nearly 12% compared to 1.82 lakh units sold in October this year, which was the highest-ever score notched up by the industry to date. Except for Tata Motors, most of the major auto manufacturers, which included Maruti Suzuki, Hyundai, Ford, General Motors and the comparatively new entrant Volkswagen, witnessed a surge in numbers in November.

Singha · Post by **Singha** » 09 Dec 2010 11:38

Indore is a hotspot of economic growth. not surprising.

btw if anyone thinks the kind of chinese goods sold in walmart are *not* being sold at present in the mom and pop shops that blocking walmart is supposed to save, they are much mistaken. the cheap chinese plastic , electrical and other goods are available in the small shops too - including diwali lights and ganesha idols.

walmart cannot make money on small operations - they will have to locate in outlying areas of cities needing a car to reach there. the localized catchment areas of the small shops will remain intact.

Rahul Mehta · Post by **Rahul Mehta** » 09 Dec 2010 20:16

Abhijeet wrote:What is the reason for the steady increase in petrol prices in India over the last 1.5 years? In April 2009, petrol was Rs. 44 a litre; it is now around Rs. 58 a litre. ...... So what's behind the slow, steady increase?

Rahul Mehta wrote: The one and only reason is rampant manufacturing of rupees.

a_bharat wrote: Crude oil price was about 50$ in Apr 09 and is at 90$ now. We had elections then, and elections are 3.5 years away now.

The reason why crude oil prices in dollars is rising is because US banks have manufactured too many dollars. So too many dollars chasing almost same quantity of crude oil. But if RBI and Indian banks had not manufactured so much of rupees as they did in past 4 years, then oil prices still would have been $90, but rupee would have appreciated to Rs 20 a dollar. And in such case, oil price in rupee would have remained same. So one important cause behind rise in crude oil price in India is increase rupee manufacturing.

Another cause is increase in number of imported or semi-imported vehicles. Had the vehicles been 100% locally made, the increase in vehicle number would have created increase in weapon manufacturing skills. And increased in weapon manufacturing skills would have enabled us to get oil wells outside India, which would have increased oil supply and kept prices low. So encouraging local engineering skills, with strategic planning, can reduce oil prices.

jamwal · Post by **jamwal** » 09 Dec 2010 20:42

A bit confused by the time-lines you are mentioning here.

Ambar · Post by **Ambar** » 10 Dec 2010 06:06

MUMBAI (Dow Jones)--Indian government bonds ended mixed Thursday as a severe cash crunch in the banking system dampened sentiment, but investors drew comfort after the central bank indicated that more steps are in the pipeline to ease tight liquidity.

The benchmark 7.80% 2020 bond, which is losing popularity due to talk of a new 10-year issuance, was trading weaker as investors shifted to its closest replacement, the 8.13% 2022 bond.

Growing market interest helped the 2022 bond rise to INR99.64 from the previous session's close of INR99.49, while the 2020 bond closed lower at INR97.94, compared with INR98.00 Wednesday.

Reserve Bank of India Governor Duvvuri Subbarao said the central bank is conscious of the tight liquidity situation and will take necessary measures to ease the cash deficit, though he didn't elaborate.

"The comments are a little comforting, but the market requires more government spending to make up for the huge (cash) deficit," said a trader with a primary dealership. "A cut in the weekly auction size and the RBI's bond buyback today will only help to a limited extent," the trader added.

Indian banks have been borrowing more than INR1 trillion daily from the central bank's twin liquidity windows that help banks meet their overnight funding needs. The RBI has also lowered a bond-holding rule, allowing banks to borrow cash up to 2% of their net deposits until Jan. 28.

In the currency market, the Indian rupee fell to its lowest in a week against the U.S. dollar, tracking a sharp fall in local shares.

The dollar gained for two straight sessions, trading at INR45.22 late Thursday, against INR45.07 late Wednesday.

The Bombay Stock Exchange's Sensitive Index, or Sensex, fell for the third-consecutive session, shedding 2.3% to close at a near two-week low of 19,242.36.

Traders said investors pulled money out to cut exposure to risky assets as the year draws to an end. Federal probes into a real estate scam and the 2G telecom bandwidth sale controversy also hurt sentiment.

"The rupee looks like it's going to have some more bad days with foreign investors staying on the sidelines following investigations into these scams," said a trading head at a foreign bank. "Foreign funds have been buying dollars following the refund of excess bids at MOIL Ltd.'s (INR12.38 billion) share sale," he added.

The trader said the market will now watch for further cues from U.S. jobless claims data due later Thursday.

Help me understand here : RBI is on target to buy 2.7 billion$ worth of govt bonds this year, some folks here mentioned that such a move was to mop up liquidity and cool a 'overheated' market. On the other hand the government has another tranche of issuance on Dec 9th and 10th. Today's performance was disappointing, which goes back to my previous post : Is RBI buying the government debt here because of our growing deficit or am i missing something here?

Theo_Fidel · Post by **Theo_Fidel** » 10 Dec 2010 11:12

Not sure why $2.8 Billion in bonds is a worry. Esp. when there are approx. $500 Billion of outstanding debt securities out there. Just his year the Govt. has borrowed $100 Billion for its budget and monetized the amount. This is a piffling amount IMO.

In any case here's something we should really be worrying about. Scares me. Courtesy Mckinsey.

Suraj · Post by **Suraj** » 11 Dec 2010 00:24

Finance Minister Pranab Mukherjee mentioned the other day that GoI has upped their current fiscal GDP growth estimate to 9.1% from ~8.4% previously, based on average 8.9% GDP growth in the first half of the current fiscal year. This sounds reasonable, and may even be an underestimate. Seasonally, Q3 (festival season) and Q4 (carryover + end of fiscal year surge) are the largest contributors to annual GDP, while Q1 (sowing/quiet season) and Q2 (too early to report harvest trends) are smaller in nominal output value. The current year data should receive an added boost from the significant rise in agricultural output, which ought to prop up Q3, Q4 and 2011-12 Q1 figures. As agriculture becomes an increasingly shrinking component of overall GDP, the seasonality of GDP may reduce.

Suraj · Post by **Suraj** » 11 Dec 2010 12:37

3Q industrial output starts with a double digit growth rate:
Industrial production expands 10.8% in Oct, fastest in 3 months

India’s industrial production grew at the fastest pace in three months, threatening to strain power and transportation capacities and stoke inflation. Stocks rose.

Output at factories, utilities and mines rose 10.8 percent in October from a year earlier after a 4.4 percent increase in September, the statistics office said in a statement in New Delhi today. The median estimate of 29 economists in a Bloomberg News survey was for an 8.5 percent gain.

Singha · Post by **Singha** » 13 Dec 2010 13:05

per a recent TOI article, laggard states like bihar, chattisgarh and jharkhand have grown at 10% in recent years (on their low base), while gujarat/TN are growing at 10% too on high base. this is with a fraction of the govt and FDI thrown at the problem in china.

vera_k · Post by **vera_k** » 13 Dec 2010 22:11

India's economic recovery 'losing steam', says OECD

Suraj · Post by **Suraj** » 13 Dec 2010 23:32

'Losing steam' ? It would help if the article or their study had any sort of concrete data instead of vague verbiage.

ramana · Post by **ramana** » 14 Dec 2010 00:05

Shouldn't it be in the psy-ops thread?

Suraj · Post by **Suraj** » 14 Dec 2010 00:10

I don't care to attribute to malevolence what can be attributed much more easily to lack of competence at doing much research. Sometimes we take these people much too seriously.

vera_k · Post by **vera_k** » 14 Dec 2010 04:46

OECD CLI

CLI components for India

The Indian trend has been towards slower growth since Feb 2010.

Singha · Post by **Singha** » 14 Dec 2010 08:30

well with the tacit blessings of the powers-that-be, yuvaraj has found an 'issue' in being the messiah of the farmer/tribals/dalits....and this involves encouraging all manner of agitations against big projects whether it has any merit or not. environment ministry is a useful cats paw too. the tribals are to be kept in abject poverty and will be provided food and transport to vote for kangress occasionally. state govts unfriendly to kangress will be harassed.

which of the mega steel projects announced in jharkhand/chattisgarh/orissa is going on course ?

only gujarat imo by virtue of its economic mass and independent financial linkages and developed systems has escaped this 'movement'

Vasu · Post by **Vasu** » 14 Dec 2010 20:28

And unfortunately a psy-ops movement has started in the media and the elites that Rahul Gandhi will be the next Prime Minister of India. People on tv ask the question regularly, especially to CONgressi's.

Democratic nations across the globe have seen puppet leaders put into power, but I sincerely fear for this country if he ever becomes PM, not that I do not fear for this country under this CONgress rule.

Theo_Fidel · Post by **Theo_Fidel** » 14 Dec 2010 21:19

vera_k wrote:OECD CLI

CLI components for India

The Indian trend has been towards slower growth since Feb 2010.

Pah!

According to that chart Ireland (101.0) should be booming right about now, Greece (98.4) should be stabilizing and Spain (101.2

) should be bombing along like nothing has happened.

Even more startlingly Japan (100.7) should be starting to boom again and grow faster that India (100.5).

Even China should be slowing down massively as it drops from 101.9 (Jan 2010) to 100.9 (Dec 2010). India's drop is much less.

Complete garbage to my eyes. Pretty obvious the numbers are 'massaged'. There should be consequences for building such a staggeringly incompetent model. Ignore.

Theo_Fidel · Post by **Theo_Fidel** » 14 Dec 2010 21:35

As far as the young (At age 40

) unmarried prince goes, the speculation is that he has made some very very powerful enemies. The rumor within the babudom is that certain organizations that had been paid off by the Types of POSCO were very unhappy that their guarantees had to be with drawn and monies not received.

I wouldn't be so blase about security if I were him. Reminds me too much of his fathers foolishness. You must understand Indian politics and it is pretty clear he doesn't have a clue. There be dragons...

Suraj · Post by **Suraj** » 14 Dec 2010 21:40

Inflation level falls to lowest in 2010

India’s inflation slowed to an 11- month low, giving the central bank scope this month to pause Asia’s fastest round of interest-rate increases.

The benchmark wholesale-price index rose 7.48 percent in November from a year earlier after an 8.58 percent jump in October, the commerce ministry said in a statement in New Delhi today. The median estimate of 27 economists in a Bloomberg News survey was for a 7.45 percent gain.

Price pressures may strengthen as industrial production grew at the fastest pace in three months in October, signaling consumer demand remains strong even after six rate increases in 2010. Reserve Bank of India Governor Duvvuri Subbarao may resume monetary tightening in January after keeping borrowing costs on hold at a Dec. 16 policy meeting as a cash crunch at lenders limits his ability to boost borrowing costs, economists said.

“The central bank will pause this month,” Indranil Pan, chief economist at Kotak Mahindra Bank Ltd. in Mumbai, said before the report. “It will hike rates in January since inflation pressures are building up and growth is strong.”

For now, a record 1.1 trillion rupees ($22 billion) of share sales by companies including Coal India Ltd. in 2010 has drained funds from the banking system.

Indirect tax collections till Nov register 50.1% gain

Indirect tax collection has registered a growth of 50.1 per cent till November 2010 over the corresponding period last fiscal, Revenue Secretary, Sunil Mitra said.

"In indirect tax front, our collection stood at 66.3 per cent of target this year till November. The collection stands close to Rs 2,08,000 crore ($46 billion) against our target of Rs 3,15,000 crore ($70 billion)," Mitra said.

Customs revenue collection grew by 64.7 per cent and central excise was higher by 37.9 per cent over last year.

Mitra said customs collections and central excise till November already achieved 73.5 per cent and 57.4 per cent of their respective targets.

Cumulative tax collection at the end of November had reached 55.8 per cent of its target of Rs 7,45,000 crore, he said.

Direct taxes stood at 50.38 per cent of the target till November at Rs 2,16628 crore with a growth rate of 17.85 per cent over the comparable period.

"Corporate tax rate grew by 22.3 per cent but its collection has not reached 50 per cent of the year's target by November end," Mitra said.

Interesting...
World Bank gives Indian statistics a leg-up

The government has started improving the statistical system of states with financial assistance from the World Bank in the backdrop of increased scrutiny and criticism of the Indian statistical system.

As a first step, the Ministry of Statistics and Programme Implementation, or MoSPI, has signed a memorandum of understanding (MoU) with the Karnataka government for the state statistical strengthening project (SSSP), for which the Centre will disburse Rs 32 crore and the state will invest Rs 13 crore towards building statistical capacity and infrastructure.

The MoU was signed in Bangalore on December 11.

SSSP, a part of the India Statistical Strengthening Project (ISSP), has a project cost of Rs 650 crore, out of which the government is contributing around 20 per cent, while the World Bank is providing the remaining 80 per cent, or Rs 540 crore.

“It is important for the state agencies to improve if we want to improve the overall statistical system. Given the level of assistance we are providing, states will not need to spend much from their side,” said Central Statistical Organisation Director General S K Das.

Out of the government’s 20 per cent contribution to ISSP, the cost of civil infrastructure would be shared between the Centre and the state governments on a 25:75 basis.

Tamil Nadu, Andhra Pradesh and Orissa are the states next in line to get the funds.

So far, 20 states have agreed to be part of this programme and after the project is implemented throughout the country over a span of 3-4 years, each state is expected to have statistical indicators in 21 categories, including economic, industrial, agricultural and social statistics.

wig · Post by **wig** » 15 Dec 2010 17:55

Revenue Collections From Indirect Taxes Increases by 42.3% During April – November 2010

Revenue collections from indirect taxes i.e., Customs, Central Excise and Service Tax Revenue (Provisional) for the first eight months i.e., April –November 2010 of the current financial year 2010-11 has increased to Rs. 2,07,756 crore which is 42.3% higher than the collections made during the same period in the previous financial year 2009-10. The previous year’s indirect tax collections were Rs. 1,45,958 crore during the same period. The current year indirect tax collections from April-November 2010 constitute an achievement of 66.3% of the overall target of Rs.3,13,471 crore fixed for 2010-11.

Revenue collections from customs have increased to Rs. 86,844 crore during April-November 2010 which is 67% higher than the previous year’s collections of Rs. 52,011 crore in the same period. This constitutes an achievement of 75.5% of the target of Rs. 1,15,000 crore for the whole year 2010-11.

Revenue collections from central excise also increased to Rs. 81,984 crore during the period April-November 2010, an increase of 34.4% over the previous year’s collection of Rs.61,020 crore during the same period. These constitute an achievement of 62.8% of the target of Rs. 1,30,471 crore fixed for the current financial year 2010-11.

As far as revenue collections from service tax for the period April-November 2010 is concerned, a collection of worth Rs.38,927 crore was made during this period which constitute an increase of 18.2% over the previous year’s collections of Rs.32,927 crore during the same period. The collections made in the first eight months of the current financial year constitute an achievement of 57.2% of the overall target of Rs.68,000 crore fixed for the full financial year 2010-11.

Overall revenue collections from indirect taxes of Rs.2,07,756 crore during the first eight months (April-November 2010) of the current financial year 2010-11 constitute an achievement of 66.3% of the overall target of Rs.3,13,471 crore fixed for the current financial year 2010-11. Last year’s collections of Rs. 1,45,958 crore during the same period constituted an achievement of 54.5% of the overall target fixed for indirect tax collections for the year 2009-10.

http://www.pib.nic.in/newsite/erelease.aspx?relid=0

Prem · Post by **Prem** » 15 Dec 2010 22:15

Signs of capex upsurge visible; GDP growth expected to pick up

http://www.livemint.com/2010/12/1420434 ... l?atype=tp

We believe that macro indicators such as huge project announcements, improving utilization levels in the system, improved business confidence, increasing end-product prices and expectation of significant demand improvement will lead to a growth in the capex cycle. Total fund raising by companies in FY10 has increased to 45% of the GDP. Funds raised by companies grew 20.5% in FY10 compared with 18% in FY09. We believe that firms such as Thermax Ltd and Cummins India Ltd that have a strong product profile, capacities and technologies, are likely to be the beneficiaries. The capex cycle, which started in 2004, took a breather between 2009 and 2010 as the world faced liquidity constraints, leading to dearth of demand affecting the prices of end products. We believe that an interruption in the capex cycle seen over the last two years could resume and accelerate over the next few years. Rising economic growth momentum, improving domestic demand prospects and growing capacity utilization since FY09 have translated into a recent growth in capacity expansion plans as well as in actual project implementation.The industry witnessed fresh investment announcements worth Rs.9.5 trillion during April-September 2010. The continuous flow of investment announcements reflects the confidence of industries in sustaining the current upsurge in demand. More importantly, the current investment boom is not triggered by the government but by companies that are optimistic about the growth potential of the economy and are investing willingly. This is evident from the fact that the share of private sector in the outstanding investment has been rising steadily—from 39% in 2004 to 58% in 2010.

Prem · Post by **Prem** » 16 Dec 2010 00:01

Good News on Employment front

http://www.efytimes.com/e1/55628/fullnews.htm
Monster Employment Index India Rises 26% YOY

The Monster Employment Index is a monthly gauge of Indian online job demand based on a comprehensive real-time review of employer job opportunities culled from a large representative selection of online job sites, including Monsterindia.com®.“Economic indicators show the Indian economy continuing to grow at a steady pace. The rise in online opportunities in the industrial production and technical sectors, as reflected in the Monster Employment Index, mirrors the current buoyant economic conditions,” said Sanjay Modi, Managing Director (India/ Middle East/ South East Asia), Monster.com IT sector rebounds; Online recruitment in the Banking, Finance and Insurance expands while healthcare eases on monthly basis Annual growth rates exceeded year-ago levels in 21 of the 27 industry sectors monitored by the Monster Employment Index. Thirteen exhibited increases in online recruitment activity on a monthly basis.
With a 22 percent annual growth, the BPO/ITES sector was the most improved sector year-on-year, with a13 percent acceleration from the annual growth rate achieved in October. The sector also registered a six percent monthly growth as employers appeared more open to hiring when compared to October. Online recruitment saw an expansion in the Banking, Finance and Insurance on a monthly basis in November, gaining 16 percent in November. The month also saw jobs rebounding in the IT sector, with online opportunities jumping six percent between October and November following the lull in October.
Logistic, Courier/Freight/Transportation recorded the highest annual growth rate with a 50 percent increase year-over-year. The sector however eased slightly on a monthly basis, while online opportunities in the Production and Manufacturing sector rose. Engineering, Cement, and Construction, Iron/Steel sector recorded growth for the third consecutive month in the index and was up five percent over October levels.

Theo_Fidel · Post by **Theo_Fidel** » 16 Dec 2010 11:42

I can't get this chart out of my head. I've been thinking about it for some time now. This one chart determines our fate. All else is Maya. Yet you never see it discussed or referred to anywhere.

Why is Private sector savings at only 7% and remaining constant. Their Capex is remaining constant. As it gets bigger as a percentage of the economy as posted above, private sector savings should be approaching at least 15%. Is it the weight of the PSU's sitting on top that is preventing their growth?

Also look at the effect of that oil price subsidy, per Suraj, had on investment and growth. We often get the wail that price rise is killing the 'commons'. But will anyone see the devastating effect such large subsidies have on investment and hence jobs/growth.

Suraj · Post by **Suraj** » 16 Dec 2010 11:57

Thanks for posting those charts and driving the point in Theo. I mentioned the critical importance of savings/GDP and investment/GDP figures to our long term growth quite a while ago; I recall scoffing at the reports in 2007 or so saying Indian GDP growth was unsustainable, pointing out that on the contrary , investment/GDP and ICOR figures made it mathematically sustainable , as it has been. Unfortunately this is dry economics. Zero sexiness and sensationalism value